Russian gas giant Gazprom doesn’t see the glut in Europe’s natural gas market going away soon, with oversupply extending well into 2021.
“The majority of challenges and threats are still here. One of them is general oversupply, which we are likely to see in 2021 as well,” Elena Burmistrova, Director General of Gazprom Export, said on Monday, as quoted by Reuters.
The glut in the European market was created earlier this year as demand slumped with the coronavirus pandemic that led to a decline in economic activity.
In the spring of 2020, Europe was so awash with natural gas amid weak demand and limited storage capacity that gas suppliers were facing the possibility of cutting flows to prevent natural gas prices from plunging further.
Demand for natural gas was very weak as major economies in Europe were emerging from lockdowns while gas in storage across the continent was at a record high for this time of the year. The natural gas glut depressed the prices at key European hubs such as the Dutch TTF benchmark. Prices didn’t move much even after the biggest gas exporter to the continent, Gazprom, saw its flows on a key pipeline fall to zero at the end of May.
Gazprom sees its exports to Europe at 170 billion cubic meters (bcm) this year, down from 199 bcm in 2019, Sergey Komlev, who heads Gazprom Export’s pricing division, told Reuters last month.
While Gazprom’s Burmistrova sees the glut in Europe persisting, she also accused the U.S. of trying to cut Russia’s share on the European market with non-market methods by threatening sanctions on the Nord Stream 2 gas pipeline project led by Gazprom.